AMERICAN CANYON -- The amount of wine-oriented storage and production space in southern Napa Valley could increase by 2.7 million square feet, or by almost a quarter, in the next few years with a half-dozen projects under construction and in the works.
These projects are coming at a time when the local wine industry has been growing quickly and a longstanding land-use dispute between American Canyon and the county of Napa over the millions of square feet and hundreds of acres of commercial space and land near Napa County Airport appears to be nearing resolution.
Commercial real estate brokerages estimate third-quarter vacancy for about 11 million square feet of industrial space in the south county business parks -- not including 700,000 square feet on the Napa Pipe property -- ranged from 4.8 percent, according to Keegan & Coppin, to more than 8 percent, according to Grubb & Ellis.
Napa-based Biagi Bros. Transportation & Warehousing obtained grading permits just issued for a 650,000-square-foot distribution facility to be built on Green Island Road in American Canyon to serve Jackson Wine Estates.
Santa Rosa-based Jackson plans to consolidate about a dozen warehouses from around the North Coast to the southern Napa Valley location, which would be served by rail. It’s part of industrial-zoned land north of Green Island Road that American Canyon annexed a few years ago.
Stravinski Development of Madera just finished a 411,000-square-foot wine-oriented warehouse on Hanna Court off Green Island Road and plans to complete a 308,000-square-foot warehouse next to it in March.
Veteran property brokers recall a similar situation in the early part of the decade, when the south county area had 1 million square feet of new space vacant. “It’s a lot of space for our market,” said Bret DeMartini of Grubb & Ellis.
However, they note that it may take until spring to know whether the slower activity in warehouse demand for large new spaces is because of changes in financial markets or the seasonal lull in wine warehouse leasing after harvest.
“We’re in a lull period in which the market has cooled off and people are assessing where their finances are,” said Mike Miller of Keegan & Coppin.
A few other large projects are part of land mostly at the northern and eastern periphery the city hopes to annex under an agreement the City Council and county Board of Supervisors approved this summer. That growth plan was reinforced by the Nov. 4 passage of Measure P, which bolstered protections for open space and agricultural preserve land.
Part of the deal would lock the city’s expanded urban limit line and sphere of influence, which control how much the city can grow, through 2030, according to the document. Also included are provisions for how the city would extend water services to new projects in the area, a heated point of contention between the city and the county in recent years, and how the city and county would divide tax revenue from the properties.
One of the projects just north of American Canyon’s extended line is The Pigman Companies’ Greenwood Commerce Center, proposed to have 364,000 square feet of warehouses in three buildings on about 18 acres south of Airport Boulevard.
The city is developing standard conditions for project approval so developers can know what they’ll be expected to include in a project application, according to Planning Director Brent Cooper. The standards, similar to what the city of Napa adopted last year, are set to go before the Planning Commission next month and the City Council in January. The conditions should flesh out requirements such as those for landscaping, so a developer can know what they’ll need to obtain bonds for.
“It follows up on what’s already in the General Plan and forces the city to think through how it will deal with infrastructure,” Mr. Cooper said.
In spring, the Local Agency Formation Commission of Napa County, which approves the growth of cities and towns, is expected to consider the city’s request to extend its sphere of influence and urban limit line to include 293 acres north of the city and southwest of the airport, according to Mr. Cooper.
That land includes 25 acres next to the county airport, 218 acres formerly planned for a large Beringer winery and now eyed for an industrial park, and 50 acres envisioned to be another industrial development.
On the largest property, a joint venture of Sacramento-based Headwaters Development Co. LLC and RREEF Americas, a real estate investment part of Deutsche Bank, wants to break ground in April on a 646,000-square-foot distribution warehouse that also would be served by rail, according to Headwaters managing member Doug Pope.
The venture, called Napa Industrial LLC, acquired the 218 acres and floated a concept for a 2 million-square-foot industrial park. A use-permit application has been filed for the one building on 39 acres. Wetlands preserves are planned for portions of the remainder of the property, but further development plans have not been solidified, according to Mr. Pope.
The site sits along the proposed extension of Devlin Road to connect with Green Island Road as an alternative thoroughfare to the congested Highway 29 and Jamieson Canyon Road interchange, according to Mr. Cooper of American Canyon.
“As highways 29 and 12 continue to get more impacted traffic-wise, rail is becoming more attractive,” Mr. Pope said.
In October, the county Board of Supervisors agreed to work out a deal with Union Pacific Railroad so Napa Industrial could build an overpass for Devlin over the tracks to serve the property. If started this coming spring, Napa Industrial’s currently proposed building would be ready by the end of next year, according to Mr. Pope. He said a large wine company is interested in leasing the whole building.
Between the Napa Industrial property and Highway 29 are 50 acres owned by Panattoni Development Co. of Sacramento. The company proposes to build a four-building complex totaling 172,000 square feet called Napa Airport Commerce Center.
